It is common during the course of a Florida probate for the personal representative to discover that the decedent has outstanding federal tax debt. When this happens, it is imperative that funds which are available to pay creditor’s claims be properly allocated to the IRS. Florida Statute 733.707, which outlines the order in which creditors of the probate estate are to be paid, states that the IRS is a “Class 3″ creditor. This means that the funds which are available after payment of administrative costs and fees, compensation for the personal representative and the fees of the probate attorney, and More…

A recent high dollar estate battle in California provides a lesson for all, especially anyone with enough assets to incur estate tax, which, absent corrective legislation, means anyone with more than $1 million (or $2 million per couple) as of January 1, 2013. That lesson is that it pays to have your estate planning reviewed periodically, the more often the better. Magnolia Audio Video founder Leonard Tweten and his wife, Eileen, had amassed a $100 million fortune over their 58 years of marriage. In an effort to avoid estate taxes, they set up a trust which contained a “formula clause.” More…

In what has been speculated as an attempt to garner party unity on a vote for a tax plan supported by U.S. President Barack Obama, Democrats in the U.S. Senate have abandoned proposed provisions for the estate tax which originally called for a partially extended estate tax cut of 45 percent on inheritances of more than $3.5 million (the same parameters as those in effect in 2009). By axing the proposed estate tax cut, the Democratic plan would ultimately restore the estate tax to the pre-Bush-tax-cuts-era of a 55 percent tax on inheritances of more than $1,000,000. The tax bill More…

As the end of 2011 draws near, we find it helpful to take one last opportunity to mention some important estate planning measures that should be reviewed at least annually. There are numerous tax planning opportunities that should be considered before the year ends. For example, everyone is generally entitled to make an annual gift of up to $13,000 per individual (or $26,000 per couple) without incurring any gift tax. Making annual exclusion gifts is a great way to thin out an estate while ensuring that the proper beneficiaries receive assets during the lifetime of the grantor. The simplest way More…

Steve Jobs, a great American innovator and the visionary who built Apple into a global technology leader from a California garage, died yesterday at the age of 56. Jobs had a history of well-documented health problems starting with an incident of pancreatic cancer in 2004. His health had been a controversial topic for years and a deep concern to Apple fans and investors. Jobs is believed to have left an estate valued at approximately 7 billion dollars. While details of how the estate will be handled have yet to surface, it is a good bet that extensive estate planning was More…

As estate planning attorneys, one of the recurring issues we encounter is a lack of knowledge regarding Florida’s documentary stamp tax and its effect on the conveyance of real property. Given the rising popularity of the revocable living trust, a basic understanding of the economic consequences of the documentary stamp tax is essential to properly planning and constructing an affordable estate plan. Documentary stamp tax is levied on documents as provided under Chapter 201, Florida Statutes. Documents subject to the tax include, but are not limited to: deeds, notes or written obligations to pay money and mortgages, liens, or other More…

The revocable living trust is an increasingly popular tool in the estate planning attorney’s portfolio. These trusts are useful for avoiding the cost and hassle of probate, as well as planning for the possibility of guardianship, and protecting family privacy. Given the desirability of these inherent benefits, it is no surprise that many people wonder whether they should make their revocable living trust the beneficiary of their qualified retirement plan. Certainly, the easiest and cheapest way to transfer retirement plan assets upon death is to designate an individual as an outright beneficiary. Furthermore, a direct bequest to an individual should More…

On May 31 2011, House Bill 469 was approved by Governor Rick Scott. House Bill 469 codifies the Florida Legislature’s efforts to statutorily protect inherited IRAs from the claims of creditors of a debtor beneficiary under Florida state law. The statute makes clear that “any interest in any fund or account that is exempt from claims of creditors of the owner, beneficiary or participant . . . does not cease to be exempt after the owner’s death by reason of a direct transfer or eligible rollover.” Furthermore, the statute states that it is “intended to clarify existing law, is remedial More…

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